It's not a restaurant ... But I think most kids would get get a kick out of the Fractured Prune donut shops. There are multiple locations. The donuts are heavy(oily), super sweet , not for confectionary purists. But they are also very colorful with fun flavors and like them or not they are unique. My kids loved them and there seemed to b a lot of young families lining up for them.

My choices for family friendly in North Ocean City (uptown) would be...Lombardi's at 94th street for fantastic pizza and decent pastaBull on the Beach at 94th street for great pit beef sandwiches (they also have steaks and seafood)Tequila Mockingbird at 130th street for good mexicanCrab Bag at 130th street for good seafood and fun atmosphereUber bagels at 126th street for excellent bagels and sandwiches